We haven't learnt anything from the rise of Trump and Brexit

By John Hewson

12 January 2017 — 6:09pm

German philosopher Georg Hegel once remarked: "Rulers, statesmen, nations are wont to be emphatically commended to the teaching which experience offers in history. But what experience and history teach is this – that people and governments never have learned anything from history, or acted on principles deduced from it."

The key question for 2017 is just how much have the "elites" learnt from recent experience? How have they actually responded to Brexit, Trump, Hanson, and so on.

The obvious answer, so far, is that the "elites" have simply not learnt anything: they have not responded substantially, rather attempting to close ranks against the "outsider", treating such events as but a mere aberration to their social agenda, soon to return to their "normal". This will not, and cannot, be a sustainable response.

Trump is already demonstrating that, like it or not, things will be different. Just look at the response to his threats to US car manufacturers – threatening a hefty tax on GM for the importation of cars built in Mexico, and how Ford, all of a sudden, decided that their planned new plant would now be built in the US rather than in Mexico.

Illustration: Andrew Dyson

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Also, think about the likely consequences of some of his foreshadowed cabinet and other appointments. For example, focus on the substance of his "trade team" of Ross, Navarro and Lighthizer, all aggressive and anti-China.

Basically, Trump ran on an "anti-establishment" agenda. He will, and must, deliver against the key elements of this agenda. As such, he will simply not just go away, and the "elites" can't afford to just turn their backs on his reality.

However, despite the significance of the challenge in recent years, there has been very little progress or reform, as the "elites" have closed ranks and moved on.

Think about the global responses to say the Asian crisis of the late '90s, and the GFC more recently, where so many called for a fundamental reform of the "global financial architecture", but, in the end, producing almost no genuine reform.

President-elect Donald Trump has promised a 'full report' into hacking claims in his first 90 days.

Photo: AP

In the very early days, we are already seeing the US Congress starting to close down or restrict the Trump agenda. The Trump administration/congressional fight has just begun.

I recall, appallingly, a Liberal fundraising dinner some years ago, where a high-paying guest asked a simple direct question, outlining myriad economic/social issues confronting the state government, seeking an explanation as to the government's committed policy response, only to be told "we will muddle through, as we have always done". End of dinner! Why should we bother!

I am disturbed at how the policy intelligentsia and the media elite are already closing ranks, as if this is just an aberration, we can, and will, handle it. Yet, they were caught short predicting that a Trump just "couldn't happen", and ever since have been attempting to rationalise their inadequacies.

Of course, many recall, and indeed take great heart from, the failures of Jimmy Carter and his "assault on the Washington establishment", in the guise of the world's greatest micro-manager.

Yes, nothing short of a disaster! But Trump is no Carter. Closing congressional ranks may not matter, as he appeals over the top directly to his electoral constituency.

The reality is that Trump will attack "'trade", he will restrict immigration, he will shoot from the hip on many issues.

The difficulty with Trump is that he believes, indeed he has "promised", that he can run the US government as he has run his various businesses.

Not much of an argument is it, when he has limped over many disasters, and racked up enormous debts in the process.

Even worse if you dare to focus on the detail on just how Trump will handle the "conflicts of interest" issues or with conflicts with the Emoluments Clause in the constitution, let alone the recent reports that over $US1 billion ($1.34 billion) of Trump Organisation debt has been "securitised" and sold to some 150 institutions around the world. Apparently, much of that debt is underwritten by Trump personally. What would happen to Trump and the presidency if things went wrong?

Moreover, success in business is definitely not transferable to success in politics. In business, you have a degree of control that doesn't translate to politics, no matter how powerful you believe yourself to be!

Actually, there are no good old days to which we may aspire to duplicate, or to return to. If Trump proves to be the disaster most expect, he will nevertheless change things.

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What we need is a government to think and strategise (say) several decades ahead, recognising the "new reality", and give us some hope that we can achieve it.

John Hewson is a professor at the Crawford School of Public Policy, ANU, and a former Liberal opposition leader.